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Local funding and resource decision-making for adult social care – the role of cost-effectiveness logics


Local authorities operate with finite funding and resources with which to support their local population with social care needs. Strategic decisions are made about the use of those resources – between service areas, client types, preventative support versus maintenance etc. Local decisions can be made using a range of criteria and logics. In healthcare, cost-effectiveness approaches have become well-established, particularly through the work of NICE.


The ‘cost-effectiveness’ (CE) approach has arguably not (yet) had the same policy purchase in social care as it has in healthcare due to a lack of support and guidance to decision makers about how to interpret and use cost- effectiveness information, and a paucity of cost-effectiveness evidence in social care. A particular issue is the lack of any consensus on what opportunity cost or cost-effectiveness thresholds should be used in social care.


  • Explore barriers to the use of CE approaches, noting the development of national policy to date , and consider how and who might fund the evaluation and CE studies.

  • Investigate how far CE ideas are embedded in social care policy locally.

  • Work with stakeholders (commissioners and providers) to assess their priorities for developing the CE agenda, and the evaluation culture.


1. Theoretical analysis and review

Drawing on cost-benefit analysis, economic theory (welfare economics) and implementation science the project will consider how cost-effectiveness logics can be deployed locally. This framework will be used to consider: how information on the cost-effectiveness of adult social care  (ASC) can be used; the limitations of this approach; and the particular characteristics of social care in this regard (e.g. informal care inputs; equity considerations etc.). This framework will be used to understand the role of using a defined opportunity cost-threshold for ASC. A second element will be to consider the setting of an opportunity cost/CE threshold for ASC, building on existing work and broadening out to include the cost- effectiveness of care home services. 

2. Assessing views of local authorities about a CE approach

Qualitative data collections will be carried out with key stakeholders to determine the extent of the local implementation of CE approaches, with a focus on the enablers and barriers to implementation, and the view of participants about the potential impact of increased use of CE evidence in local decision making. 

3. Identification of needs for support

A gap analysis will be carried out to determine what tools and guidance might be of help to decision makers to promote the use and implementation of a CE approach.


Julien Forder (Lead), Eirini Saloniki, Daniel Roland


  • Start Date: January 2020

  • End date: March 2021

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